[HN Gopher] Suspicious discontinuities (2020)
___________________________________________________________________
Suspicious discontinuities (2020)
Author : explosion-s
Score : 471 points
Date : 2024-03-20 16:31 UTC (1 days ago)
(HTM) web link (danluu.com)
(TXT) w3m dump (danluu.com)
| Simon_ORourke wrote:
| A friend of mine from a farming family in Europe once told me a
| story that his family would wait until the year one of his
| siblings was due to go to college and then invest in new farm
| machinery. Their reported net income for the year would reduce or
| go negative and the sibling would get to college effectively for
| free on a hardship tuition grant.
| DontchaKnowit wrote:
| Yep very common tactic for small business owning families.
| IncreasePosts wrote:
| At least in America, they usually look at the past 2-5 years of
| income to avoid these types of shenanigans.
| ridgewell wrote:
| In Canada, they use gross income instead of net income for
| student grants.
| tocs3 wrote:
| So, what happens if you work in an area where the cost are
| high but the margin is low? You might make $100K but have
| $85K in costs. You still have $15K in income. Does this
| apply to those self employed or only wage earners (gets a
| paycheck)?
| groestl wrote:
| In Austria, we just don't have tuition fees, which also
| avoids these types of shenanigans :)
| SilasX wrote:
| Huh? Wouldn't they have to depreciate it over several years so
| only a fraction of it would be a deduction in the current? Or
| is the idea that they'd buy so much capital equipment that even
| the fraction they could depreciate that year would wipe out all
| the other income?
|
| AIUI, the concept of depreciation exists in tax law precisely
| to prevent indefinitely deferring taxes via reinvestment
| (though it can't do anything about the portion of reinvestment
| going to pay salaries a la Amazon):
|
| https://news.ycombinator.com/item?id=15061439
| bombcar wrote:
| Many countries allow accelerated deprecation of designated
| equipment.
|
| Here's the IRS's - https://www.irs.gov/newsroom/additional-
| first-year-depreciat...
| richrichie wrote:
| > The following histograms of Russian elections across polling
| stations shows curious spikes in turnout and results at nice,
| round, numbers (e.g., 95%) starting around 2004. This appears to
| indicate that there's election fraud via fabricated results
|
| Two observations: 1. Why from 2004? Things were much worse in
| Russia before 2004. 2. The numbers of this election seem to agree
| with approval rating polls conducted by western agencies.
| inglor_cz wrote:
| By 2004, a former KGB spook was in power long enough to
| introduce a falsification system.
|
| The 1990s were worse _economically_ in Russia, but Yeltsin was
| a relatively liberal politician and possibly didn 't _want_ to
| falsify elections.
| richrichie wrote:
| I am not sure. Yeltsin was "our guy". He was feted by us, he
| even addressed the congress, etc. Until he was not when he
| refused to deliver Russia on a plate.
|
| Guys that are not "our guys" never win a legitimate election.
| Remember how integrity of elections were questioned when a
| guy that is not our guy won an election in 2016?
| inglor_cz wrote:
| I am far from sure either, but Yeltsin had some "street
| cred" speaking for him. I remember the 1990s quite well,
| being a teenager with intense interest in politics.
|
| He got to power by organizing a folk uprising against an
| attempted coup by KGB generals Kryuchkov et al., who were
| hardliners and quite skilled people as well; they caught
| Gorbachev and held him hostage.
|
| https://en.wikipedia.org/wiki/1991_Soviet_coup_attempt
|
| That coup could very well succeed and that would mean death
| for Yeltsin, possibly after a torture session in Lubyanka.
| He certainly demonstrated personal courage there.
|
| What followed was "too free Russia". As in, lawless. It had
| certain advantages. For the first time in Russian history
| ever, multiple independent media sprang from the ground and
| journalists would criticize and attack powerful figures in
| a way that they no longer can; we're used to it, but open
| media criticism of powerful people is actually not that
| typical in the world. But at the same time, crooks stole
| everything and the regular Russian suffered. As a nasty
| consequence, democracy and freedom became one with poverty
| and corruption in minds of many Russians.
|
| Yeltsin only contested one election, in 1996. His opponent
| Zyuganov was a classical communist. The result was 54.40%
| for Yeltsin and 40.73% for Zyuganov. Was this election
| clean? How can I know? But it wasn't a travesty with 90 per
| cent for The Leader and paper figures for "opponents";
| Zyuganov was a real politician with a competing party and a
| very different program, and he got 40 per cent of the vote,
| and nobody fell out of the window etc.
|
| Everything is relative, and I believe that for the
| standards of Russia, Yeltsin was by far the most liberal
| leader in its history.
| richrichie wrote:
| Good points.
|
| It didn't matter that Yeltsin was the most liberal of
| all. He did not roll over and play dead for NATO
| expansion and balkanisation projects. So he became a
| pariah overnight and was painted as an alcoholic and
| corrupt.
| lupire wrote:
| 2004 was the first election after the dictator took office and
| decided he would never leave. (He pretended to leave once,
| installing a puppet for 1 term, due to Constitutional limits.
| When he officially returned, he amended the Constitution to
| make himself dictator for life.) He's still dictator 20 years
| later.
| Xcelerate wrote:
| Haha, I recall seeing a similar plot with a "suspicious
| discontinuity" when I looked up data on home appraisal price vs
| sale price. I remember asking the loan officer why the contract
| was forwarded to the appraiser before they did the appraisal,
| because that might bias their assessment. She gave me a funny
| look and replied "that's kind of the point."
| jeffbee wrote:
| Yeah of course, the appraiser is a person who is paid to write
| down the predetermined number. The US federal government should
| nuke this industry as part of their crackdown on "junk fees".
| Either the appraiser serves a legitimate arms-length purpose or
| their whole line of business should go away.
| sanderjd wrote:
| I could see a third option as a "lemon detector". That is,
| instead of their output being a number, it would be a binary,
| intended only to limit downside risk in the worst cases.
|
| I think in practice this is indeed the role they play. If I'm
| "overpaying" by 20%, the appraiser will probably still "write
| down the predetermined number", but if I'm overpaying by 100%
| and taking out a mortgage to do it, there's a pretty good
| chance that the bank's appraiser is going to sink that deal.
| bombcar wrote:
| That's basically what they do, they're not to find the
| actual value of the property (that's more properly a tax
| assessor, perhaps) - they are there to make sure the
| valuation is "in the ballpark" to what it would liquidate
| for.
|
| An appraiser will never get in trouble if a bank forecloses
| on a $500k property and it sells for $450k or so, but they
| will get in trouble if the $500k property only sells for
| $200k - they'd need to explain why.
| lesuorac wrote:
| I think it's really a problem of different incentives.
|
| Somebody (A) at the bank does not want to give out loans that
| are well beyond a properties value.
|
| Somebody (B) _else_ at the bank is actually the one giving
| you the loan and makes money from you getting it.
|
| So A requires B to have an appraiser so they can't completely
| run away writing loans. From talking to some real estate
| agents, the appraiser will only fudge so much for you. An
| appraiser might agree that the house is worth 750k even if
| they actually think its 699k but if you try to get a 700k
| loan for a 350k house they'll write down 350k in their
| appraisal.
|
| --
|
| IIRC, the government's crack down on "junk fees" is mostly
| that you can't advertise a price and then inflate it later
| with fees. So as long as the bank states that they require an
| appraiser and their in-house cost is $X; it doesn't count as
| a junk fee. But if the bank says that the loan is going to
| cost say $5k in overhead and then later says it doesn't
| include appraisal fee then it be a junk fee.
| margalabargala wrote:
| > An appraiser might agree that the house is worth 750k
| even if they actually think its 699k but if you try to get
| a 700k loan for a 350k house they'll write down 350k in
| their appraisal.
|
| This is kind of the point. The appraiser isn't trying to
| find the "true value" of the house, otherwise buyers would
| hire appraisers prior to even offering a bid.
|
| The question that the bank wants answered is, "is this
| house sufficiently matched to loan amount such that if the
| borrower defaults, the house can be sold for enough money
| to recoup the loan?"
|
| And if the answer is "yes", then they write down the
| number.
| SilasX wrote:
| Semi-related: the time an appraiser raised the estimated
| value after the couple removed all traces of the place being
| inhabited by black people:
|
| https://www.firstcoastnews.com/article/news/local/jacksonvil.
| ..
|
| Reddit /r/nottheonion discussion: https://old.reddit.com/r/no
| ttheonion/comments/igk83g/jackson...
| xenadu02 wrote:
| Appraisals function as a major fraud reducer, especially for
| internal fraud.
|
| Appraisers will fudge $100k on the value of a $1m house
| because that's their opinion as an appraiser. They won't
| fudge $1m on the exact same house (2x value).
|
| That serves as a kind of cap on funny business to some
| extent. 10% of the value isn't going to make that much
| difference on the ability to pay for most borrowers so an
| excess $100k in the valuation doesn't _really_ matter anyway.
| As long as appraisals don 't get too out of line they serve
| their purpose.
| dclowd9901 wrote:
| When I was selling, I must've gotten the only appraiser in the
| world that actually appraises rather than just follows the
| contract. Idiot lost me $15k on my house.
|
| But yeah, it's _very_ clear their appraisal, which is usually
| _dead on_ with the offer, is a sham. I mean, even just
| considering the incentive structure (Who's going to hire an
| appraiser who causes deals to go sideways?), it's clear that
| they're just a middleman taking their cut.
| philomath_mn wrote:
| Appraisals are such a joke. We had an appraiser say that my new
| construction was going to appraise at $100k under cost -- so my
| broker fired him, ate the fee, and hired an old friend of his
| instead. She gave us the number we needed and the deal closed.
|
| Then again, the finished house then appraised at $50k _over_
| cost 12 months later when I converted the construction loan, so
| maybe the first appraiser really was nuts.
| jeffbee wrote:
| Similar to car prices, we see the same mental rounding effect in
| rents. People will rent a home for $2100 or $2200, sometimes even
| $2150 for those truly dedicated to price finding, but hardly
| anyone rents an apartment for $2137.
|
| Source: my data for the city of Berkeley
| https://observablehq.com/@jwb/berkeley-rent-board-data#cell-...
| Macha wrote:
| The car pricing seems to be that some amount of people round
| 79,999 down to 70,000 when determining mileage and so cars with
| 79,999km on the odometer are penalised much less than cars with
| 80,000km.
|
| I think the rent one is much more driven by "some landlords
| like round numbers for posting ads/doing their finances".
| bombcar wrote:
| The "round prices" is definitely a factor, the math may say
| to rent for $2134 but the landlord will either round that
| down to $2100 or up to $2200.
|
| And unless increases are limited by some law, they will
| usually only raise it by even amounts.
| Izkata wrote:
| This is the same reason grocery store prices are $x.99,
| people anchor on the first digit and $5.99 feels like a lot
| less than $6.00
| madcaptenor wrote:
| You might get some of that if rent is raised by percentage.
| When I started my current job my salary was an integer multiple
| of $10,000. I got a raise at the end of my first year that was
| an integer percentage (3%, IIRC) so my salary was then an
| integer multiple of $100. The following year I got a raise
| again (it might have been an integer percentage, I don't
| recall) and my salary was just some random-looking integer.
|
| Rent-controlled Berkeley apartments are allowed to increase
| rent by some fixed percentage, so maybe you can see this in
| your data? But I don't think the math would work out so
| cleanly.
| jeffbee wrote:
| Very true, but the graph I posted is initial leases only.
| madcaptenor wrote:
| I see you said that in your link. Maybe I should read more
| carefully before making comments.
| jeffbee wrote:
| Reading any part of it launches you into the top
| percentile already.
| JohnMakin wrote:
| I went to school at a relatively late age and started in
| community college. The school/state had a policy where any
| independent income earners making less than 35,000/year would not
| pay tuition. A single dollar over that would require paying full
| tuition of ~$60/unit or about $750 a semester. One year I worked
| a little more overtime during the holidays than usual and
| realized with a week to go in the year that I'd go a few hundred
| dollars over, so I called out of a few shifts and nearly got
| fired over it. I barely squeaked in under the limit, and if I
| hadn't, there was pretty much no way I would have been able to
| continue school. It's not like I could suddenly afford it now
| that I made $35,001 vs $34,999. I have never understood why
| things like this don't use some sort of sliding scale, rather
| than absolute dividing line.
| hammock wrote:
| An instructive image of the welfare trap:
| https://en.wikipedia.org/wiki/File:Welfare_trap.png
|
| People making $30K on welfare would need to make $81K at an
| actual job to have the same income after tax.
|
| More info: https://en.wikipedia.org/wiki/Welfare_trap
| autoexec wrote:
| Something seems very off with that image. I've known a lot of
| different people who were on welfare over the years, and not
| one of them had a standard of living anywhere close to what
| someone who nets $60,000 a year does. That said, there is
| absolutely a cliff where you could risk a loss just by taking
| in more money.
| amanda99 wrote:
| The main feature of that image is "childcare" which seems
| to be a fixed subsidy of $16k (and "CHIP", ~$4k related to
| child health care).
|
| I don't know what the former means and how these are
| calculated, but if you don't have children, this graph
| would look a lot less exciting.
| autoexec wrote:
| The ones I've known with kids all seem to have it far
| worse. If they were getting a $16k tax credit or whatever
| it must not have been making up for the other costs
| involved with raising children.
| danaris wrote:
| That graph is also showing an _ideal_ situation--that is,
| you fully qualify for _and_ fully receive all of the
| benefits listed.
|
| That means you have to also know that you qualify for
| them, apply for them, prove that you qualify, oh, nope,
| whoops, you missed one piece of proof there--that means
| you have to start all over.
|
| You have to apply for each one, prove that you qualify,
| jump through all the hoops, you start receiving benefits!
| Now it's time to apply for the next one, get the
| _slightly different_ proofs together, send them all in--
| oh, what 's that? someone gave you just enough money that
| you went over one of the limits? you get nothing this
| year!
|
| A new year, you have to apply for each one, prove that
| you qualify....
| GolfPopper wrote:
| So, are you going to go for that 14th job interview, or
| are you going to go spend four hours making sure you have
| childcare next month? Do you finish the online test, or
| do you fill out the form on the benefits website for the
| fifth time this month?
| UncleEntity wrote:
| In my cab driving days I hauled around a bunch of people
| to/from medical appointments and they talk on the phone a
| lot...
|
| Some people are absolute experts at navigating the
| bureaucracy to the point I expect they know the rules
| better than the people that work at the various
| government agencies. It was quite impressive to be
| honest.
|
| One example off the top of my head; this lady was talking
| on the phone with a friend (or whoever) explaining how
| their benefits would be impacted if they declared the
| father of the children resided in the household and how
| it was much better to just lie and claim to be a single
| mother.
|
| No judgement from me as it was quite the education on
| governmental programs.
|
| As an added bonus I also learned a bunch of methods on
| how to steal groceries from walmart since people are
| surprisingly candid on these things when they're just
| having a conversation with some random cab driver they
| probably won't ever see again.
| danaris wrote:
| If you've got the mental bandwidth and dedication to
| learn these kinds of things, it _can_ be very impressive.
| This is obviously a much less dramatic example, but when
| my wife worked for a costume wholesaler over a decade
| ago, she had to learn how customs regulations worked in
| order to design costumes that would be able to be
| imported without the higher duty associated with
| "wearable garments", and by the time she left that job,
| she knew the regulations better than at least some of the
| customs agents she had to interact with.
|
| I have great respect for people who can learn to navigate
| government bureaucracies well enough to avoid getting
| caught up on all the deliberate snares and thorns--all
| the moreso if they can do so while also being poor,
| working 3 jobs, raising kids as a single parent, etc.
| RhodesianHunter wrote:
| 16k wouldn't cover daycare in much of the US let alone
| food, clothes, etc.
| wizerdrobe wrote:
| What are you imagining the typical rate is in much of
| America. When we lived in the city we had a range of
| about 225 to 300 per week as of last year. Outside of the
| city we pay 160 per week.
|
| The real issue was the waiting list...
| ok_computer wrote:
| Lol, over 400/week is standard in eastern PA, US. Many
| daycares sampled in our search. Medium cost of living
| suburban area.
|
| Also over 1 year wait list.
| Wolfenstein98k wrote:
| If you have a wait list, the price isn't high enough
| fshbbdssbbgdd wrote:
| Or maybe you value the consistency of full enrollment
| that comes with a waitlist over the additional revenue
| you could earn with higher prices. Could be the case if
| there are high costs to changing the size of the
| business.
|
| Imagine there's a law that you can only have 4 children
| per caregiver. Your capacity is 8. Lose one and your
| revenue is down 12.5%
| truckerbill wrote:
| A good example of where free market ideology falls flat
| kaitai wrote:
| You are a lucky person. I just looked up my tax
| statements for 2022 and I paid $1341.67/month for an
| older kid (not infant). Waiting lists are atrocious and
| everywhere (and many places charge a $75-150 deposit for
| the waiting list alone); we got in fast because it was a
| new location. I am in the Midwest, not a coast.
| AnthonyMouse wrote:
| > The ones I've known with kids all seem to have it far
| worse. If they were getting a $16k tax credit or whatever
| it must not have been making up for the other costs
| involved with raising children.
|
| Worse than someone who doesn't have to pay raise a kid
| isn't the same thing as worse than someone else with kids
| who makes $8000 more and therefore loses the $16,000
| credit.
|
| And the cliffs are only half the problem. Did you get a
| childcare subsidy? Only if you use approved providers,
| which charge more than your older niece would to watch
| the kids, and now the money goes to some bureaucratic
| corporation with lawyers and lobbyists instead of your
| own family, and you see your niece less often and don't
| talk to her dad as much and now he's less likely to offer
| to do you a favor when you need one or realize that you
| do.
|
| You also get a housing subsidy, but only for particular
| housing, which isn't as close to your job or doesn't
| allow you to pool resources with roommates, so now you
| have to pay more for transportation or most of the
| subsidy gets eaten by higher rents etc.
|
| The entire welfare system should be vaporized and
| replaced with a tax credit for the poor (i.e. a UBI).
| gottorf wrote:
| > The entire welfare system should be vaporized and
| replaced with a tax credit for the poor (i.e. a UBI).
|
| Yep, call it a negative income tax if it goes down better
| than UBI, but many other things would be better than the
| system we have now.
| Aerroon wrote:
| The problem with UBI isn't so much the politics, it's the
| feasibility of the cost. $12k a year over 300 million
| people is 80% of the US government's tax revenue.
|
| A negative income tax might work out a lot better on the
| numbers, but it won't help the people that need it the
| most (the ones that can't get a job).
|
| But hey, maybe it can work. The US has a deficit spending
| of $1.7 trillion in 2023, $1.4 in 2022, $2.7 in 2021.
| That $1.7 would cover almost half of a $12k ubi. But how
| long could that last?
| advael wrote:
| This is nonsensical for numerous reasons
|
| 1. The federal government doesn't have tax revenue. It
| issues a currency and then taxes go toward countering
| inflation. The notion that a currency-issuing government
| needs to "balance its budget" in its own currency is a
| political fiction. Also, policies that benefit people at
| the lower end of the income spectrum disproportionately
| actually move money around in the economy, which
| generally speaking is less inflationary than allowing it
| to accumulate in various silos like hedge funds
|
| 2. A "negative income tax" doesn't have to require
| employment. You can make zero dollars in income as a
| self-employed person, and the self-employed still track
| their income for taxation purposes
|
| 3. There are many unnecessary-to-malicious subsidies and
| inefficient welfare programs that could easily have their
| rationale subsumed by UBI, and doing so would save
| considerable cost that is mostly the overhead of all the
| means-testing personnel and in some cases (like SNAP)
| completely separate financial machinery necessary to
| maintain them
|
| Even setting all that aside, you could make considerably
| more "tax revenue" by funding the IRS or reversing some
| of the nakedly corrupt corporate tax breaks that have
| been created over the last several decades. There always
| seems to be more money to subsidize artificially lowering
| the price of certain goods, fund incredibly inefficient
| private government contractors to do things that once
| cost considerably less for the government to do itself,
| fund drug research only to then allow the resulting
| breakthroughs to be patented by a private firm and then
| gouge people for treatment, or buy ludicrously expensive
| weapons for militarized police forces, but propose
| anything that actually benefits people and suddenly
| everyone's worried about the costs.
|
| Not to put too fine a point on it, but all this "Well
| have you considered the cost?" handwringing people do
| when UBI comes up just drastically misunderstands how
| governments use money, while claiming to be "responsible"
| and "realistic"
| eru wrote:
| Your point (1) sounds like the same old 'modern monetary
| theory' that never amounted to anything. To quip, MMT is
| both novel and correct. It has both novel and correct
| parts (but no parts that are both).
|
| See eg https://www.econlib.org/library/Columns/y2021/Sumn
| ermodernmo...
| gottorf wrote:
| > you could make considerably more "tax revenue" by
| funding the IRS
|
| The US government expenditure as percentage of GDP is now
| over one-third, as opposed to the pre-WW1 long-term
| average in the single digits. Keep in mind that massive
| infrastructure projects like the Transcontinental
| Railroad were able to be built in those single-digit
| percent times, or that US educational spending per pupil
| has been going up year after year for decades yet student
| achievement flatlined, and of recent years been trending
| down. Clearly, more tax revenue is neither necessary nor
| sufficient for the public good.
|
| > reversing some of the nakedly corrupt corporate tax
| breaks
|
| No arguments from me there.
|
| > fund drug research only to then allow the resulting
| breakthroughs to be patented by a private firm and then
| gouge people for treatment
|
| Fundamental research and bringing a drug to market are
| markedly different areas that require very different
| skills and incentives. An organization that is good at
| one is not necessarily good at the other. And this isn't
| confined to drug research; an architect can draw up plans
| for a house, but a family cannot live in a plan.
| Foundations need to be poured, chalk lines snapped,
| lumber nailed together, and plumbing and wires laid, all
| in the context of a competitive marketplace.
| advael wrote:
| I attribute a lot of the higher expenditure and lower
| efficiency to the continued insistence that outsourcing
| to contractors, effectively picking winners in a "market"
| to give monopoly status, is a better way to provide
| government services. These firms have little if any
| accountability to the electorate, no incentive to set
| reasonable prices, get anything done efficiently, and in
| some cases don't even produce working services
|
| Similarly, bringing a drug to market with a patent is not
| a competitive marketplace, by design, and it consistently
| creates an outcome wherein people are charged exorbitant
| sums of money because of this non-competitive market.
| Doing a bunch of government-backed R&D and then getting a
| patent for it is the government picking a winner, not
| creating a market
|
| Basically, it seems like the government was and remains a
| lot more efficient when it directly builds the capacity
| to provide goods and services it determines to have an
| interest in providing, rather than try to do this through
| "the market" (again, this is almost never an actual
| market)
| AnthonyMouse wrote:
| > outsourcing to contractors, effectively picking winners
| in a "market" to give monopoly status
|
| In principle this is supposed to be a competitive bidding
| process, and then the winner is chosen by the most
| competitive bid rather than the government. In practice
| the process is corrupt and regulatory barriers are
| created to prevent smaller companies from submitting bids
| or project requirements are set such that only one
| company can satisfy them.
|
| The problem here is corruption, which has nothing to do
| with whether the corrupting entity is a corporation.
| Public sector unions lobby for the same kind of labor-
| inefficient practices because they know that more jobs
| give them more members which give them more power, even
| (or especially) when the jobs are unnecessary or
| inefficient.
|
| The advantage that existed pre-WWII is that neither large
| government contractors nor large public sector unions
| already existed in order to lobby for corrupt practices
| and their continued existence, so the government could
| just pay someone to do work and then have them to return
| to the private sector when the work is done. But WWII
| created such a large apparatus dependent on taxpayer
| revenue that it had enough lobbying power to sustain its
| continued existence, and now it needs to be disassembled
| before we can have nice things again.
|
| But probably the best way to do it is under anti-
| corruption. You still want roads and ships to be built,
| but if you could get the corruption out of the bidding
| process then they'd be built by smaller and less
| consolidated companies with less individual lobbying
| power, and then you could address efficiency issues
| without having to fight a multi-billion dollar
| corporation or huge public sector union because that
| inefficiency is their profit margin/job. Another
| possibility would be anti-trust -- break the big
| government contractors up.
| advael wrote:
| No, the problem would exist even if the bidding process
| was completely fair, because it still creates a situation
| where a long-standing project creates stable returns for
| a company while decoupling the service it provides from
| both market forces and public accountability. It is the
| worst of both worlds: shielded from market forces by
| having its customer be the government, providing a
| government service shielded from public accountability by
| the corporate veil
|
| Yes, we should reduce corruption and break up existing
| entrenched players, but the core issue is in the
| structure of that kind of arrangement. I do also think
| that there's no good reason to have a "corporate veil" in
| the first place, but that's a broader problem
| AnthonyMouse wrote:
| > it still creates a situation where a long-standing
| project creates stable returns for a company while
| decoupling the service it provides from both market
| forces and public accountability.
|
| But that's just a mechanism for the corruption. The
| contract for the design of something and its manufacture
| and maintenance should each be separate bids. Even each
| _stage_ of the design should be a separate contract that
| could go to someone else. The government says "we need a
| design for a ship" and they put it out to firms who
| submit their proposals and then the government picks one
| and buys it outright. Then they say "we need a design for
| a propulsion system for this ship" and take bids again.
| If you need to modify the ship's design some to
| facilitate it, that's fine, because none have been built
| yet and the necessary change gets incorporated into the
| design before you put out contracts to build any of it.
|
| What you want is for each of the contracts to be as small
| as practicable, to maximize the number of potential
| bidders. None of this "single contract to design and
| build an entire fleet of ships and maintain them for 30
| years" nonsense.
| advael wrote:
| Yea, that does seem like a reasonable way to design less
| corrupt mechanisms for these processes, but I think the
| standard way piecemeal designs like that get rejected is
| by arguments to "efficiency" (Nevermind that efficiencies
| gained by bundling require some pretty strict discipline
| within a firm, mostly benefit the firm, and are easily
| dwarfed from the government's perspective by the
| inefficiencies taken on by the problem we're talking
| about)
| Projectiboga wrote:
| Actually most of the money is created as debt. Lincoln
| and JFK both issued 'Green backs', money not created via
| debt issues. But neither lived too long
| AnthonyMouse wrote:
| The cost is fiction because it's a tax credit. The money
| is on both sides of the ledger. If you're making
| $60,000/year and your pre-credit taxes go up by $12,000
| and then you get a $12,000 tax credit, you have paid an
| additional zero dollars in taxes. If you don't make much
| money and the government used to pay you a net $10,000 in
| benefits and now you get a $12,000 UBI and pay $2000 in
| taxes, that hasn't actually cost any additional money,
| all it does is convert the needlessly inefficient
| constellation of benefits into cash.
|
| The "universal" part of a UBI is serving the same purpose
| as the progressive rate structure in the income tax, i.e.
| you want an effective rate curve which is higher for the
| rich than the poor. Which means that you don't need both.
| What you use instead is a flat tax rate which serves as
| the de facto "phase out" for the UBI. Except that because
| it's all in one place, there are no cliffs, and there are
| no poor people paying higher de facto marginal rates than
| rich people, and there are no mountains of paperwork to
| apply for benefits.
| eru wrote:
| > The cost is fiction because it's a tax credit. The
| money is on both sides of the ledger. If you're making
| $60,000/year and your pre-credit taxes go up by $12,000
| and then you get a $12,000 tax credit, you have paid an
| additional zero dollars in taxes.
|
| Yes, but marginal rates are important, too.
| Projectiboga wrote:
| Most people miss that the 'money' will get spent. This
| should lead to an income multiplier. Then hopefully to a
| reallocation of resources moving bureaucrats from
| administrative work to something else.
| AnthonyMouse wrote:
| > Yes, but marginal rates are important, too.
|
| Which is exactly the point. What's the "marginal tax
| rate" on low and middle income people of the existing
| benefits phase outs?
|
| The >100% marginal rates that create actual cliffs are so
| patently absurd that no one can look at them and find any
| way to justify it, but even when the combined tax+phase
| out rates are in the neighborhood of 80-90% of marginal
| income, that's still not what we want, is it?
| kaitai wrote:
| In my Midwestern area, infant care is ~$2000/month or
| more at a center and you get down to ~$1200 a month if
| you're at the right kind of center by age 4. So there are
| still some thousands to contribute to childcare even with
| $16k "off" and then that doesn't count diapers or clothes
| or formula (breastfeeding is great but you can't do it
| forever, some can't do it at all, and it is very hard to
| do on a practical level if you've got an hourly/service
| job).
| hammock wrote:
| The chart (2012) is from Gary Alexander, Pennsylvania's
| Secretary of Public Welfare - so take note the commenters
| who are trying to suggest this is libertarian propaganda.
|
| Pennsylvania has a substantial program to pay for child
| care for many of its residents:
| https://www.dhs.pa.gov/Services/Children/Pages/Child-
| Care-Wo...
| amanda99 wrote:
| It is not: it's inspired by it.
|
| If you look carefully, the numbers are different. In
| Gary's picture, the cliff is from $29k to $69k or so; the
| one above is much wider.
|
| Also direct link:
|
| https://web.archive.org/web/20140205020059im_/http://www.
| aei...
|
| (It is funny though, the picture above seems to be very
| much from a serious libertarian.)
| tomrod wrote:
| Does their political philosophy category make their
| argument more or less legitimate in some way?
| lobocinza wrote:
| Emotionally, yes. Rationally, no.
| autoexec wrote:
| > The chart (2012) is from Gary Alexander, Pennsylvania's
| Secretary of Public Welfare - so take note the commenters
| who are trying to suggest this is libertarian propaganda.
|
| In fairness, the linked image is sourced to a
| libertarian's blog and Gary Alexander is also a
| conservative who was appointed to Corbett's
| administration and was often criticized for extensive
| cuts to Pennsylvania's welfare programs which he
| characterized as fighting fraud and waste until he
| resigned after a few scandals
| (https://www.washingtonexaminer.com/politics/2380594/ex-
| penns...) including the fact that he was still living in
| Rhode Island and was charging tax payers for his
| travel/commute expenses.
| albrewer wrote:
| CHIP -> Child Health Insurance Program.
| chefandy wrote:
| Well, this is well outside of my area of expertise, but the
| only factual dispute attached to the image in wikipedia is
| that SSI is only available to people essentially assumed to
| be out of the work pool. From the SSI site: "Little or no
| income, and Little or no resources, and A disability,
| blindness, or are age 65 or older." That's a pretty tiny
| slice of that graph. Maybe it just hasn't been thoroughly
| interrogated but my gut says that whoever attached that SSI
| criticism would have probably addressed more severe
| discrepancies first.
|
| The source-- a libertarian blog-- implies that the problem
| is welfare itself, but I think the bigger problem is a
| naive approach to means testing that is entirely divorced
| from economic reality.
| hammock wrote:
| The primary source is a welfare bureaucrat, Gary
| Alexander, Pennsylvania's Secretary of Public Welfare,
| not a libertarian blog:
| https://youtu.be/Ruzo8bm96Io?t=2191
| p_j_w wrote:
| This fact alone doesn't mean much. He was appointed by a
| Republican governor and could very easily be a
| liberterian ideologue to the same degree of said blog.
| pierat wrote:
| So you actual critique over the chart provided and the
| claims made therein, rather than your ad hominem?
|
| I don't care who it was. Are the claims verifiable, and
| are the derived claims defensible?
| autoexec wrote:
| A conservative "welfare bureaucrat" who was brought in to
| gut the welfare system
| chefandy wrote:
| Thanks for the correction. I know nothing of that person.
| tossedacct wrote:
| You mean former Secretary of Public Welfare, who resigned
| after two years on the job in 2013. He now runs an anti-
| welfare consulting business. He was highly controversial
| during the two years he was in the job, and the Obama
| administration had to step in. He also claimed he was
| moving to Pennsylvania, and then used public funds to
| commute to his Rhode Island home instead.
| heroprotagonist wrote:
| How much of that standard of living is based on credit,
| though? Credit is largely based on income. Housing, payment
| flexibility for amenities and vacations, big ticket
| purchases that reduce long-term costs, etc.
|
| When 3/4 of those making less than 50k and 2/3 of those
| making less than 100k are living paycheck to paycheck, that
| extra flexibility influences quality of life quite a bit.
|
| Quote (https://www.bankrate.com/finance/credit-
| cards/living-paychec...): * Statistics
| vary, but between 55 percent to 63 percent of Americans are
| likely living paycheck to paycheck. *
| Three in four Americans who earn less than $50,000 are
| living paycheck to paycheck, compared to roughly two in
| three of those making $50,000 to $100,000.
| autoexec wrote:
| I'm sure that's part of it. It could help explain how one
| person has to live in a roach infested apartment while
| another can get a nice house in the suburbs. Same with
| having no car or only being able to afford a used one in
| poor condition vs having nice new cars with very low
| monthly payments. Those two things alone can mean a lot
| in terms of standard of living.
|
| I know that they say it's expensive to be poor but it'd
| be a very broken system if we had a $60k a year social
| safety net for everyone, but poor people still couldn't
| afford fresh healthy food, reliable transportation, or
| adequate housing and were still fighting to keep their
| heads just above water.
| deathanatos wrote:
| That graph needs [citation]s. The source it cites does not
| mention how they obtained the figures for childcare, and a
| questioner in the comments asks for, and does not receive, a
| source for that information. The source article itself
| doesn't even seem to be the source, it links to yet _another_
| article. That article _also_ doesn 't seem to be the source,
| the source appears to be ... a politician.
|
| The childcare part -- the largest and most problematic
| benefits cliff in the graph -- appears to be specific to PA.
| But PA doesn't offer a monetary childcare benefit: one would
| have to be arguing that _this is the specific dollar amount
| that the care is worth_ ... which ... IDK. I 'd like to at
| least _see_ that argument. But the vesting cliff, as
| depicted, doesn 't line up with any of PA's cutoffs,
| _either._
|
| So, this graph smells of statistical lies.
| hammock wrote:
| The original chart (2012) is from Gary Alexander,
| Pennsylvania's Secretary of Public Welfare.[1] Pennsylvania
| has a substantial program to pay for child care for many of
| its residents:
| https://www.dhs.pa.gov/Services/Children/Pages/Child-Care-
| Wo...
|
| [1]https://youtu.be/Ruzo8bm96Io?t=2191
| em500 wrote:
| Here's an older CBO report making the same point (p.15): ht
| tps://www.cbo.gov/sites/default/files/cbofiles/attachments.
| ..
| dclowd9901 wrote:
| I... can't figure out what you're saying.
|
| 1) "making $30k on welfare". What is the dollar amount here?
| Literal checks? All support including food stamps?
|
| 2) someone making $81k will take home something like $50k of
| their income. That's _way_ more than $30k
| LoganDark wrote:
| That's an incredibly concise description of it, thank you.
| AceJohnny2 wrote:
| > _I have never understood why things like this don 't use some
| sort of sliding scale, rather than absolute dividing line._
|
| Because it's easier to pass a law that sets up such welfare
| when it has a simple threshold, or at least it was.
|
| Last time this article came up, someone referenced a group of
| lawmakers in the US who were working at smoothing out these
| awful discontinuities, but I can't quickly rustle up the link.
| bombcar wrote:
| And there are tons of these various programs, all with
| differing requirements, and some take into account others and
| some don't.
|
| Some trigger "automatically" (if you apply for X and receive
| it, you qualify for Y, Z) and that can have weird side
| effects, too.
| cranky908canuck wrote:
| The cliff might be a political feature: you save paying out
| the benefit (that you took credit for funding) since people
| who blow the cliff lose the money, but if they complain can
| be characterized as (some variation of) "welfare cheats".
| danaris wrote:
| Frankly, because many people think that any kind of welfare or
| assistance is, at best, a necessary evil--and more often just
| _evil_ --and they _want_ to make it painful, complicated, and
| hard to access.
| JohnMakin wrote:
| There were parts of what I described that were brutally
| difficult. Particularly, we would receive a certain $ amount
| to purchase books (that were frequently $500+ dollars per
| semester). However, the office that doled this fund out would
| frequently be _weeks_ behind, or your scheduled disbursement
| just wouldn't show up. Then you'd have to find multiple hours
| out of your work week to go down to the financial aid office
| to wait in line for hours in an office that was only open
| 10am-2pm. Or sometimes the complete scam of a bank /card they
| forced you to use had some issue.
|
| So, frequently, you wouldnt even be able to purchase books
| without a loan or extending credit til 1-2 months into the
| semester. by that time you could be having midterms and tons
| of assignment with no textbooks. I would frequently have to
| beg other students to let me photocopy sections of their
| books so I could do the assignments. Or resort to pirating.
|
| To them that's "working as intended" I guess. no amount of
| complaining ever got anywhere.
| lynx23 wrote:
| And given how much (light) abuse I know about in personal
| circles, and how some people think they deserve everything
| they can claim, strict rules are likely a rather good idea.
| munk-a wrote:
| > some people think they deserve everything they can claim
|
| If they are able to claim something doesn't it stand to
| reason that we think they deserve it? I am confused how
| you'd measure your qualification for welfare without using
| the qualification metrics.
|
| At the end of the day welfare in the US extremely stingy
| even if you manage to max it out - it can be a struggle to
| survive in a lot of areas due to a lack of CoL adjustments.
| JoshTriplett wrote:
| A program strict enough to ensure that absolutely _zero_
| people get it who "shouldn't" is also a program strict
| enough that many of the people who _should_ get it don 't.
| Not because they don't meet the criteria, but because the
| bureaucracy around vetting people is sufficiently hard to
| navigate.
| dragonwriter wrote:
| > I have never understood why things like this don't use some
| sort of sliding scale, rather than absolute dividing line.
|
| They often do use sliding scales, but that's more complex (and
| expensive) to administer, and (because of multiple interacting
| programs) ends up not actually solving much of anything. Also,
| because of the way things (including available funds) work, but
| even ignoring budgeting for the increased admin cost, a sliding
| scale probably would start stepping down from full benefit
| where a sharp cutoff is, that would probably be more like the
| middle of the sliding scale, so if you "barely squeaked in
| under the limit" on the sharp cutoff version, you'd probably
| get _far less_ benefit under a sliding scale system.
| duxup wrote:
| I changed career paths post age 40 via a coding bootcamp.
|
| Despite being a terrible student when I was younger, I found
| had a great time learning, and I've really enjoyed my job ever
| since.
|
| I found myself in a strange position though, lots of services
| offered benefits to students, discounts, internships, storage /
| compute time etc. I was not enrolled in a traditional
| university (although they were administering it), and so I
| didn't qualify, for much of any of those kinds of offers. Most
| of the systems in place thought of students as a typical 4 year
| university student and frankly ... younger. One internship I
| applied to did not seem to clearly indicate they were only
| really interested in younger, and more traditional students
| until the second interview.
|
| Some of these rules I get, they don't want someone abusing
| their free / discounts for other reasons and they have systems
| in place for dealing with traditional students.
|
| With people changing jobs and seemingly continued potential for
| the need for job market retraining and related disruption and
| etc ... it feels like it's time to make some adjustments as far
| as what a "student" is and so on.
| thfuran wrote:
| >One internship I applied to did not seem to clearly indicate
| they were only really interested in younger, and more
| traditional students until the second interview.
|
| Well, you missed out on a lucrative lawsuit there if you're
| in the US. An interviewer telling someone they're not going
| to be hired because they're over 40 (or even just because
| they're not young enough, when they are over 40) is legally
| equivalent to telling them they're not going to be hired
| because they're black or Jewish.
| duxup wrote:
| When you're changing your career and trying to get into an
| industry ... it's hard to know how that plays out. More
| directly a buddy of mine, also my age, and in the same camp
| was straight up told by a recruiter they were looking for
| someone younger. He had her on speakerphone and asked her
| to repeat it and she did.
|
| Then the question was, do you want to be the guy who calls
| that out? Trying to get a job...
|
| I don't think the outcome is a sure thing, in that case I
| wanted to do / say something but I felt like it was the
| applicant's call. Not an easy decision.
|
| I respected his choice to just move on, still burns me up a
| little, but his call IMO.
| sircastor wrote:
| I finished my bachelors degree after I turned 40. I was a
| much better student than I'd been in my 20s or teens.
|
| My wife is friendly pursuing her bachelor's and it is clear
| to both of us that universities are really just tolerant of
| non-traditional students. You won't be treated poorly, but
| all of the infrastructure, tools, class progression, etc, is
| constructed around post-Highschool young adults.
|
| It's been a while since I've been to a community college, but
| I suspect they're slightly better.
| duxup wrote:
| I agree, there's a weird culture barrier almost at times.
|
| My wife was in grad school and pregnant. Some of the
| instructors seemed completely confused on how to handle
| things. Others seemed to handle it in stride.
|
| It's like there's an expectation that "you're relatively
| poor, young" and some other expectations that when that's
| not the case the system starts to fall apart.
| kwhitefoot wrote:
| It's because the people who make such rules are both innumerate
| and if not lazy then uncaring.
| Wowfunhappy wrote:
| Not to condone the school's policy, but could you have donated
| the excess income to charity to get your taxable income back
| under the limit?
| gringoDan wrote:
| Probably not relevant unless you have itemized
| deductions/donations above the value of the standard
| deduction.
| IIAOPSW wrote:
| >I have never understood why things like this don't use some
| sort of sliding scale, rather than absolute dividing line.
|
| Try translating your idea of a sliding scale into a piece of
| legislation which matches your intention.
| QuadmasterXLII wrote:
| Here's my shot: Anyone may at any time declare a portion of
| their income to be "cliff income," pay 40% percent tax on it
| to the feds and 20% to the state, and then keep the last 40%
| to do with as you please. All govt and private programs that
| measure income are required to disregard cliff income.
| korhojoa wrote:
| The usual solution is something like: for x units of excess
| past the set limit, remove y unit of subsidy/support.
|
| Example: something costs 20 money, if you earn 100 money or
| below, then it is subsidized to cost only 10, where 10 money
| is a subsidy. For every 2 money you gain, 1 money in subsidy
| is removed.
|
| If you earn 104 money, it will now cost 12.
|
| The x and y values vary depending on what kind of things are
| subsidized, but this is a fairly simple way of doing it that
| doesn't punish you harshly for a small difference in
| earnings.
| madcaptenor wrote:
| (2020), but still interesting.
| lesuorac wrote:
| > It's generally believed that this is caused by a discontinuity
| in youth sports:
|
| > 2. Within a given year, older kids are stronger, faster, etc.,
| and perform better
|
| I've seen a few youth ice hockey games and by god it's just
| unfair; there's a kid like a foot taller than the rest. I'm kind
| of surprised there isn't some system that buckets kids by size ,
| it can't be fun for the small kids to get elbowed in the neck
| every time they bump the tall guy.
| ddtaylor wrote:
| I remember playing basketball as a kid and being very
| entertained beating kids that were much taller than I was.
| Sure, they had the height, but they lacked so many fundamental
| skills and sometimes it was clear they didn't think they had to
| work very hard or do practice drills because they were tall.
|
| Fun fact, the ball and hoop don't care about any of that. It
| lets me steal it from you and it lets me put it into the hoop.
| The scorekeepers even add two to the scoreboard!
| gopher_space wrote:
| > Fun fact, the ball and hoop don't care about any of that.
|
| Tangent: I grew up around a high school basketball coach and
| saw that _all_ of the adults knew exactly who was going to
| college in which sport, and usually by late jr. high. We 'd
| go to games just because he said some kid on the visiting
| team was going pro and that's exactly what happened.
| robk wrote:
| Can you expound more? How did this work across different
| fields of sport? I assume a basketball scout can recognize
| talent early in their domain but how is it crossing sports?
| gopher_space wrote:
| We're talking about people dedicated to the idea of
| "sport" in general getting excited about kids in local
| communities who are already talented and driven enough to
| be twice as good as their peers. Sports scouts follow up
| on phone calls more than they discover talent hidden away
| in the cornfield, if you see what I mean.
| toast0 wrote:
| If you've ever played Nintendo's Ice Hockey (1988), it's super
| realistic, and the tradeoffs of big vs little are clear: little
| guys bounce off of big guys and big guys move slow.
|
| My kid is in 12U youth hockey and is a big guy, and yeah,
| smaller kids can often usually skate around him, but if they
| bump into him, they fall over, and often he'll get a "big kid
| penalty" which means he gets a break in the penalty box for the
| crime of being tall and physically near a smaller player who
| fell over. We had to do a bit of coaching on how to make
| (allowed) physical contact so it reasonable contact doesn't
| look like prohibited contact (mostly be sure to have hands off
| when kids are falling, it's real easy to look like cross
| checking when it was actually just incidental contact).
|
| Some of the littler kids seem to have a lot of fun getting away
| with a lot more physical play than he can. Although he says he
| enjoys it when a small kid gets mad at him and tries to knock
| him over, too. So at least so far, seems like everyone is
| having fun.
|
| I don't think you can really just bucket kids by size and
| ignore age though... there's a lot of mental development
| between 10U hockey and 12U hockey, and putting a big 10 year
| old on the 12U team is often not right because the level of
| play is so much different, most 10 year olds won't keep up. At
| the same time, a small 12 year old on the 10U team is going to
| have a big advantage from age.
|
| Around here we do have two different leagues, one for
| 'recreational' teams and one for 'reputation' teams, and you
| more or less have to demonstrate a decent amount of skill to
| get on the rep team, and then you're playing with much better
| teams. All the teams are composed of a mix of big and small
| kids though.
|
| Edit to add: All that said, I think bucketing kids by age makes
| sense _and_ I agree that there can be advantage to being at the
| extremes of the cohort. Since the US school system usually has
| a different cutoff date (september-ish) than US youth hockey
| (jan 1), you might see different results where there 's grade
| level based high school hockey and age based youth hockey...
| but not in Canada where the cutoff is Jan 1 for both.
| bombcar wrote:
| I think you could bucket by age but have the ability to move
| kids around.
|
| The problem is that these youth sports can get very
| competitive, and then people will be tempted to move the
| bigger kids down to get an advantage.
| toast0 wrote:
| At least in USA Hockey, it's not too hard to get approval
| for kids to 'play up', our 12U team this year had 3 kids
| that were under age by one year. Getting approval to 'play
| down' is a lot harder. Our competitive league rules say
| (sorry for caps) "HAVING 10U PLAYERS PLAYING UP AT 12U IS
| STRONGLY DISCOURAGED, BUT OCCASIONALLY THERE ARE COMPELLING
| REASONS TO DO SO. EACH ASSOCIATION AT THEIR DISCRETION MAY
| ALLOW UP TO TWO 10U PLAYERS PER SEASON TO PLAY UP AT THE
| 12U DIVISION." And further players are on a case by case
| basis, determined by a league coordinator from the opposite
| side of the state.
|
| USA Hockey rules don't permit playing down unless a doctor
| says it's medically necessary, but then they're not allowed
| to play on competitive teams. Simply being small or
| unskilled is specifically not an acceptable reason. [1]
|
| IMHO: playing up is pretty easy to administer, but playing
| down would be very hard to administer fairly for
| competitive teams, so it's just flat out prohibited.
|
| Edit for further thought: If you have enough participants,
| it might make sense to try running Jan 1 leagues and Jul 1
| leagues and see if it makes sense to go to quarterly
| leagues too. Or maybe agitate to change the cutoff for
| Spring Hockey and see how that looks?
|
| [1] https://www.sedistrict.org/page/show/834907-playing-up-
| down
| munificent wrote:
| _> I don 't think you can really just bucket kids by size and
| ignore age though... there's a lot of mental development
| between 10U hockey and 12U hockey, and putting a big 10 year
| old on the 12U team is often not right because the level of
| play is so much different, most 10 year olds won't keep up._
|
| A friend of mine has a son who is giant for his age. The kid
| is 7 but he's the size of a late middle-schooler.
|
| One of the things that ends up being really difficult for him
| is that everyone around him assumes that he should be smarter
| and more mature than he is. They inadvertently expect him to
| be mentally the same age as kids the same size as him. It
| sucks because it makes him seem developmentally disabled or
| emotionally unregulated. He's not! He's a totally normal
| seven-year-old. Just a really tall one.
| toast0 wrote:
| Yeah, we definitely get/got a lot of that. At his current
| size/age, it's not so bad, but it was definitely a bigger
| deal when he was a newborn that looked like 2 months old
| (delivery nurses didn't understand why we were in their
| ward), and a preschooler who looks older, where there's a
| lot of development happening in a short amount of time.
| MichaelZuo wrote:
| I noticed the same in Ontario, any kids who weren't born in the
| first few months of the year had a huge disadvantage.
| dang wrote:
| Related:
|
| _Suspicious Discontinuities_ -
| https://news.ycombinator.com/item?id=28452926 - Sept 2021 (54
| comments)
|
| _Suspicious Discontinuities_ -
| https://news.ycombinator.com/item?id=22378555 - Feb 2020 (297
| comments)
| rwmj wrote:
| Also UK VAT. Companies only need to register for VAT when they
| turn over more than PS85,000 in a year. This adds a great deal of
| extra complexity for running the company. Predictably a lot of
| companies earn just less than this amount. The graph is worth a
| thousand words:
|
| https://www.economist.com/cdn-cgi/image/width=1024,quality=8...
| (from https://www.economist.com/britain/2023/04/11/britains-tax-
| ta...)
| bluedino wrote:
| One similar thing is getting a 1099-MISC for 'side work' in the
| USA
|
| For example, I'll do some hands-on work for a former employer.
| Rack some network equipment, go investigate something, install
| some hardware...They take it from there, I can bill a couple
| hours and it's a nice dinner for my wife and I.
|
| However, if I hit a certain threshold ($600?), they will send
| me a tax form and I'll then have to pay income tax on that
| money.
| dragonwriter wrote:
| > However, if I hit a certain threshold ($600?), they will
| send me a tax form and I'll then have to pay income tax on
| that money.
|
| No, the threshold at which you have to include the income in
| your taxable income ($400/yr) is lower than the threshold for
| the person paying you to provide a 1099-MISC ($600/yr from
| that payer.)
| bombcar wrote:
| Don't you always have to include the income even if you
| don't get 1099'd?
|
| The $400 is only if it's your _only_ income, otherwise
| plumbers could always charge $399 a visit and never pay
| tax.
| gottorf wrote:
| The threshold at which you have to include the income in
| your taxable income is $0.01.
| nominatronic wrote:
| A similar fun example is the distribution of Elo ratings on a
| chess site, e.g. here's the weekly distribution on Lichess for
| Bullet games (less than 3 minutes):
|
| https://lichess.org/stat/rating/distribution/bullet
|
| It's easy to understand why this happens:
|
| - Player ratings will fluctuate by small amounts as they win and
| lose individual games.
|
| - People are happy to stop playing when their rating is at e.g.
| 1503, but if it's 1497, they'd rather play just one more game
| than leave it that way.
|
| - At any given time, most accounts are not playing, so the
| distribution shows a bias towards values just over a 100 Elo
| threshold.
|
| The other neat thing is that you can see this effect reduce as
| you look at longer time controls:
|
| Blitz (less than 10 min):
| https://lichess.org/stat/rating/distribution/blitz
|
| Rapid (less than 30 min):
| https://lichess.org/stat/rating/distribution/rapid
|
| Which makes sense because the time and effort of gambling just
| one more game to get the rating back over the line is higher at
| the longer time controls.
| chatmasta wrote:
| > At any given time, most accounts are not playing, so the
| distribution shows a bias towards values just over a 100 Elo
| threshold
|
| FYI, that graph only includes players who were active (played a
| game) this week.
| nominatronic wrote:
| Yes, but that doesn't change the fact that out of all the
| accounts included, most of them won't be actively playing
| games right now.
| chatmasta wrote:
| In fact none of them will be, because it's computed by
| analyzing the rolling last 7 days, and each accounts
| "ranking" is whatever their ranking was at the end of that
| period (i.e. "now," more or less).
|
| Basically I'm not sure why you're saying that leads to a
| bias toward "slightly above 100."
|
| Ohh... unless you meant slightly above a _multiple_ of 100.
| I see now. Because people stop playing when they hit a
| milestone, right.
| noqc wrote:
| Haha, guilty. I put my rapid rating above 2k and haven't played
| in months since then.
| isolli wrote:
| When I dip below 600, I usually get angry and play more, then
| lose and quit even further down.
| mananaysiempre wrote:
| (That's basically how the election falsification example in TFA
| works, too: a lot of individuals targeting a subjectively nice
| metric without cooperating with one another.)
| s_dev wrote:
| Or you can look at the cut off date of competitive sports
| players and athletes. If January 1st is the cut off for age
| there will be a disproportionate number of players born in
| December. If it's June 1st many of the players will have
| birthdates in May and April.
| abnry wrote:
| Another place this shows up is in online chess ratings.
|
| See Lichess: https://lichess.org/stat/rating/distribution/blitz
|
| Couldn't find this in Chess.com stats, but maybe they do some
| smoothing in their plot.
| chubbyFIREthrwy wrote:
| >One reason people were looking for ways to lose money was that,
| in the U.S., there's a hard income cutoff for a health insurance
| subsidy at $48,560 for individuals (higher for larger households;
| $100,400 for a family of four). ... That means if an individual
| buying ACA insurance was going to earn $55k, they'd be better off
| reducing their income by $6440 and getting under the $48,560
| subsidy ceiling than they are earning $55k.
|
| I had the opposite problem for the 2022 tax year: I turned out
| that, with investment losses and no earned income, my adjusted
| income was below the poverty line, which ... means your ACA
| healthcare subsidy is cut off entirely!
|
| https://www.irs.gov/affordable-care-act/individuals-and-fami...
|
| The "logic" there (from reading discussions of the cutoff) is
| that, "well, if you're below the poverty line, you should be on
| Medicaid and not on the ACA exchanges at all, silly!" Okay, but
| if you have wildly varying income, and a high income from
| previous years, you don't know that you'll be "in poverty" this
| year, and won't qualify because of the past year.
|
| I was tempted to update my taxes to claim phantom income from my
| imaginary cash-based business, which would then get me the
| subsidy, but that feels ick.
|
| (Which, I know, being retired on crypto, I _also_ feel ick about
| taking the subsidies to begin with, but that 's a different
| issue.)
| PaulDavisThe1st wrote:
| A reminder to anyone reading that there is no actual "opposite
| problem" to yours (which I'm very disturbed to hear about, hope
| things work out).
|
| For now, there is no income level cut off for ACA premium
| subsidies, just a limit that says you should never spend more
| than 8.3% of your AGI (more or less) on health insurance (more
| or less).
|
| This may change next year and/or in the future.
| mikepavone wrote:
| > The "logic" there (from reading discussions of the cutoff) is
| that, "well, if you're below the poverty line, you should be on
| Medicaid and not on the ACA exchanges at all, silly!" Okay, but
| if you have wildly varying income, and a high income from
| previous years, you don't know that you'll be "in poverty" this
| year, and won't qualify because of the past year.
|
| This wasn't setup this way because it was thought to be a good
| design, but as a political compromise. At the time, it was seen
| as important to keep the headline cost of the bill below some
| arbitrary threshold and for it to be revenue neutral (the
| wisdom of this is questionable in hindsight since the moderate
| Dems that supported the bill mostly got wiped out anyway and it
| never got any Republican support). Medicaid is cheaper for the
| government than ACA subsidies (at least for low income people
| given the way the subsidies are structured), partly because the
| government has a lot of negotiating power and partly because
| Medicaid is stingy.
|
| This was made worse when the Supreme Court ruled that the
| federal government couldn't make receiving existing Medicaid
| funding conditional on Medicaid expansion (Medicaid is
| partially funded by the federal government, but the program is
| administered by individual states) so whether the Medicaid
| expansion is even available to you largely depends on whether
| your state is run by Democrats or Republicans (with a few
| notable exceptions).
| chubbyFIREthrwy wrote:
| People like me are an extreme edge case, I doubt this was a
| big factor in any debate.
| galdosdi wrote:
| I would consider just taking the medicaid for a year.
|
| Medicaid can actually be very good quality healthcare, if
| you're located say, near a very good research hospital in a
| city with a structural oversupply of medical care due to having
| a lot of med schools.
|
| I'd rather have medicaid living next to a high quality (non
| profit) health system, than "nice" insurance living in a
| shithole. All the insurance in the world can't materialize
| doctors that aren't there
| dragonwriter wrote:
| > I would consider just taking the Medicaid for a year.
|
| ACA subsidy eligibility may be annual, but Medicaid
| eligibility is based on current _monthly_ income, and if you
| have a change that makes you ineligible, you lose it. You
| can't just decide to "take Medicaid for a year" because you
| aren't subsidy-eligible based on prior-year income.
| galdosdi wrote:
| So? Isn't losing medicaid an ACA qualifying event? Your
| income goes up, you lose the medicaid but now qualify for
| ACA.
|
| That said, in my secondhand experience across multiple
| states I won't name, the medicaid office probably won't
| actually find out or do anything before 12 months are up.
|
| Also, a few states are starting to officially enact
| "continuous eligibility" and intentionally not check your
| income for 12 months -- mostly for children[1] right now,
| but some states for adults[2] too.
|
| [1] https://www.medicaid.gov/medicaid/enrollment-
| strategies/cont...
|
| [2] https://www.commonwealthfund.org/publications/issue-
| briefs/2...
| creer wrote:
| ACA subsidy eligibility is not annual. "Income changed" is
| a qualifying event.
| armchairhacker wrote:
| At least in the government, there should be a law that any
| hypothetical scenario where someone making more money before
| government taxes/incentives would cause them to earn less after,
| must be quickly resolved by replacing hard cutoffs with
| gradients.
|
| No benefits should apply 100% for anyone making under a certain
| amount and 0% for anyone making over. Instead there should be a
| range they slowly decrease, so that if you make $1 more before
| the benefit you still get less than $1 after. Maybe even a lot
| less, like only $.30. But you should never _lose_ money.
|
| This is obvious. It goes to show how bad beaurocracy and subtle
| misaligned incentives are that these hard cutoffs ever existed in
| the first place.
| throwitaway222 wrote:
| This is why people don't want to pay taxes at all
| baggy_trough wrote:
| It all comes back to the fact that government is a low
| accountability sector, despite what many people seem to think.
| callalex wrote:
| What is the point of saying something like this? Would you
| prefer that people just not bother to do anything and let
| poor people starve to death instead?
| RhodesianHunter wrote:
| The "starve the beast" propaganda has been wildly
| successful and is seeded deep in American culture and
| psyche.
| mrguyorama wrote:
| "Vote for me and I'll show you how bad I can make
| government" has been supremely effective, somehow
| pierat wrote:
| Republicans want to cut funding to programs, then point
| at how bad the underfunded program is doing, thus
| demanding more cuts. Either the result is the department
| is killed, or is on a shoestring budget and everyone
| hates them. Many were welcomed departments doing good
| works. People eventually tire of chronically underfunded
| gov depts, and vote the other side.
|
| Democrats want more taxes, which inevitable come from
| middle class, not being able to get it from the poor or
| rich. Then they set laws in those programs as "means
| testing", where the poor get the benefits, and the middle
| class doesn't. The rich never needed it. The middle class
| tire of paying for everything and getting nothing, and
| vote the other side.
|
| And, that pendulum swings back and forth.
|
| And that's how we get this horrible ass-backward system
| we have. And going back to first principles and doing is
| right is "against the other side!".
| baggy_trough wrote:
| It's important to deal with reality as it is. Perhaps
| government is not always the best way to prevent poor
| people from starving to death.
| tomrod wrote:
| If we anticipate the private or nonprofit providers might
| perform poverty alleviation more optimally, we
|
| (1) massively duplicate fixed costs for logistics
|
| (2) ignore that a primary reason governments exist at all
| is to help prevent people from starving to death, despite
| it often being hijacked by powermongers
|
| Just gotta say, that's a pretty extreme position to take.
| mcculley wrote:
| The private charities that fill the gaps left open by
| government are another form of government, just not
| democratically elected.
|
| (I realized I was contributing to that problem by
| donating to local charities.)
| creer wrote:
| That won't change until there is wide enough demand to
| change it. Broad recognition will come long before the
| changes.
| euroderf wrote:
| Replace one number (the cutoff) with two (the start and end of
| sliding part).
| orangecat wrote:
| Right, and this is one of the reasons why I support a UBI that
| replaces most existing welfare programs. Amazingly some people
| criticize UBI on the grounds that it removes the incentive to
| work, when it's almost exactly the opposite.
| lannisterstark wrote:
| Funnily, I'm okay with people not working if they didn't want
| to. Most people would end up getting bored doing nothing
| after a few months and work with what they like to do anyway.
| GolfPopper wrote:
| But, "what they like to do" isn't necessarily anything that
| will make billionaires more money.
| gottorf wrote:
| Devil's advocate: the longer you stay away from gainful
| employment, the more marketable skills you lose. (This is
| one of the arguments against a minimum wage; that it keeps
| low-skill and therefore low-pay labor from establishing a
| foothold in the labor marketplace that would enable them to
| up-skill over time.) So UBI would incentivize the creation
| of a permanently unemployable underclass.
|
| I'm OK with people not working if they don't want to, too,
| as long as those people are OK with subsistence-level
| living standards. I don't see why able-bodied people who
| are capable of working but just don't want to should live a
| comfortable life at the expense of the working taxpayer.
| lannisterstark wrote:
| > as long as those people are OK with subsistence-level
| living standards.
|
| I mean, UBI never meant "Extravagant money." It has
| always meant something akin to "basic standards for
| survival."
|
| The entire idea from what I understand is that you should
| be able to survive just fine, not have it pay for your
| 98" micro OLED :P
|
| > the longer you stay away from gainful employment, the
| more marketable skills you lose.
|
| I sorta relate to this as someone who's been coasting by
| at my current job for last year or so. But I'm also
| working to upskill myself actively. You bring a good
| point but I don't know what teh solution to that would
| be.
| edzillion wrote:
| Point taken, Mr. Devil. I even agree, up to a point - and
| I think this might be a major issue in the immediate
| introduction of a UBI. The reason why is that the
| incentives will change but there will be many who have
| learned the system under different conditions and will
| not so easily adjust.
|
| I've grown up amongst poverty and while I don't
| particularly like the term (as it tends to be deployed in
| aid of demagoguery), there really is a element of
| 'welfare culture' in effect, and having been on welfare
| myself (and treated like a prince because bizarrely the
| system was obviously classist: so Ed you're an out of
| work indie game dev and you're currently learning
| something called 'Nim'? "well that's just great then have
| some money". Go in there as a bricklayer and say you are
| looking but haven't found any work the past few weeks:
| here are 20 forms). I was always very impressed on the
| knowledge these working class labourers would have of the
| welfare system, because in their situation it really made
| a difference.
|
| Their attidue was: (and who can blame them) fuck the govt
| they don't give a shit about me, the more I get / the
| more I can play the system, the better.
|
| UBI from their perspective would be total victory. No
| more queuing no more forms or interviews, just free money
| for ever. But what then?
|
| If the UBI was only sufficient for survival / dignity but
| not enough for luxury I think the psychological topology
| chances _a lot_ and what could be previously described as
| 'getting one over on this enemy' now can only be
| described as your own failure.
| dragonwriter wrote:
| The devil doesn't need volunteer advocates, he can afford
| plenty paid. But you actually make the case _for_ UBI as
| a replacement for means-tested welfare and its associated
| cliffs: "the longer you stay away from gainful
| employment, the more marketable skills you lose."
|
| That's one of the main points of UBI as a replacement for
| means-tested welfare [0]: eliminating the perverse
| incentives against maximizing outside work and for
| expending energy into working the system that exists with
| means-tested welfare that has complex eligibility rules
| and is rapidly cut with outside income. By making the
| clawback _much_ slower and starting much higher up the
| income scale through the tax system, UBI, compared to the
| status quo, rewards gaining additional income in the
| labor (or other) market and learning skills other than
| navigating a welfare system.
|
| There is a reason that UBI--under the name "negative
| income tax" because of the political valence of taxation
| on that corner of the political universe--was originally
| a right-libertarian proposal.
|
| > I'm OK with people not working if they don't want to,
| too, as long as those people are OK with subsistence-
| level living standards
|
| There's no plausible way a UBI provides anything
| substantially better than that any time in the near
| (likely, the lifespan of abyone now living) future, so
| that shouldn't be a problem.
|
| [0] Perhaps even stronger if UBI is also seen as a
| (partial or full) replacement for the minimum wage, which
| could be justified because, unlike means-trsted welfare,
| it doesn't tail off with income and provides a basic
| support level for all--there is then no reason that
| employment must _also_ serve that minimal support
| purpose, which makes it possible to offer employment
| whose marginal value to the employer is less than would
| minimally support an employee, but which would still be
| positive (and in some cases still have more long-term
| value to the employee because of experience that could
| contribute to more valuable future employment.)
| skybrian wrote:
| I'm early-retired and all I can say is that it didn't work
| that way for me. I do have more time, but I'm not so bored
| that I want to tie up my schedule. I'll come up with a
| project I can do at my own pace.
|
| It's sort of like telling yourself that you'll go back to
| school. Some people do, but most don't.
| lannisterstark wrote:
| > I'll come up with a project I can do at my own pace.
|
| Right, but wouldn't that be similar? Obviously there are
| going to be people who are going to say "screw it, I'm
| going to live like this" on a basic survival-wage UBI,
| but I doubt a majority would want to.
| skybrian wrote:
| I wouldn't expect a small but steady income to be enough
| all by itself, but it will put people closer to retiring.
| When combined with some savings, I'd expect some people
| would choose to retire earlier than they would if they
| didn't have it.
|
| I do support UBI, but I also expect that it would have
| complicated effects.
| hackerlight wrote:
| Is UBI the same as a negative income tax that Milton Friedman
| advocated for?
| jiggawatts wrote:
| The most common variant is for (effectively) every adult
| citizen to receive a fixed "tax refund" amount.
|
| This is paid for by a combination of: replacing existing
| welfare with UBI, retrenching the bureaucrats that used to
| implement those complex welfare programs, and increasing
| the percentage of income tax paid.
|
| There's some threshold where you might pay extra $20K on
| your income, but you get a flat $20K back as UBI, so you
| don't notice any change. This is typically somewhere in the
| middle class. Everyone poorer than this gets a boost to
| their income and/or have their existing welfare (and
| associated requirements!) replaced by an _unconditional_
| payment.
|
| Everyone richer pays more tax, but not a huge amount more,
| since UBI mostly replaces existing welfare. It isn't an
| entirely new type of welfare on top of existing welfare --
| this is the _strawman_ that the right-wing likes to use in
| debates.
| dclowd9901 wrote:
| These kinds of anti patterns are quite intentional and meant to
| drum up resentment for government programs for all sides of the
| argument.
| dragonwriter wrote:
| > At least in the government, there should be a law that any
| hypothetical scenario where someone making more money before
| government taxes/incentives would cause them to earn less
| after, must be quickly resolved by replacing hard cutoffs with
| gradients.
|
| Multiple programs, offered by different jurisdictions, with
| overlapping populations, each with sliding scale benefits that
| reduce less than $1 of benefit for each $ of income, still can
| (and do) end up with beneficiaries losing in net with
| additional income. But instead of doing so at particular cliff
| points associated with each program, they do so continually
| over a wide range. You replace a series of cliffs with a slide.
| bluedino wrote:
| I'd bet the race time data looks similar to weight-lifting data
| for certain thresholds, whether it's the number or plates or
| such. Goals people set and then they mentally stop themselves at
| that goal.
| UncleOxidant wrote:
| We had something like this when we were on ACA one year. I hadn't
| been working that year, but I ended up getting a job in August
| and it looked like we were going to go over the income threshold
| because we have a rental and were getting rental income. I asked
| the renters to please not pay their rent for Sept-December until
| January of the next year. They happily complied. We were able to
| squeak under the threshold, but it was close.
| hsjsbeebue wrote:
| I guess you were taxed on cash accounting not accrual?
| UncleOxidant wrote:
| Didn't receive the income for 4 months of rent until January
| of the next year. Reported the income in the year it was
| received. Isn't that generally how it works? (not an
| accountant or a tax expert)
| dragonwriter wrote:
| Individual income taxes in the US are usually cash basis (it
| is poasible to change to accrual, but from what I understand
| it almost never makes sense for an individual to do so.)
|
| And only individual income taxes would be directly relevant
| to individual ACA subsidy eligibility.
| atulvi wrote:
| Need to add this one here
| https://twitter.com/martinmbauer/status/1769672126905090386
| dec0dedab0de wrote:
| The worst one of these that affected me was money helping people
| in the 2008 housing crisis. qualifying was based on what
| percentage of your income your mortgage payment was. So I would
| have got it if I had made a little less money, or if i had bought
| a house I knew I couldn't afford. It felt like being punished for
| making the right decisions.
| Karellen wrote:
| So... people who'd been misled into making bad decisions and
| were being given help because they really needed it, made you
| feel like you were being punished by not getting similar help
| you didn't really need because you were making OK money and had
| avoided making the same kind of mistake?
|
| IMO, that's a _really_ glass-half-empty way of looking at the
| situation.
|
| You did good! Try to give yourself a break. People like you who
| didn't fall for the sleazy mortgage brokers helped limit the
| damage that the rest of society had to deal with. And maybe
| next time some society-wide con goes down, if you (or someone
| you love) is unlucky enough to get stung by it (because none of
| us are smart enough to spot the con-men 100% of the time),
| hopefully you (or they) will get the help that's available that
| time around when it is really needed.
| immibis wrote:
| It's definitely both a glass-half-empty way of looking at
| things, and also true. I think the point is that the people
| who did the right thing ended up, at the end, with smaller
| houses and the same money.
| dec0dedab0de wrote:
| I forgot to mention that because of the crash I was
| underwater on the house and couldn't afford to sell it even
| though I wanted to.
|
| It was also something silly like the article, where if I made
| like $5k less annually I would have qualified for much more
| than that. I was struggling at the time and really could have
| used it.
| munificent wrote:
| This is like saying, "If only _my_ house had been destroyed by
| a hurricane too, and then I would have qualified for that sweet
| FEMA money. "
|
| I mean, sure, but you were still better off to not have your
| house destroyed in the first place.
| thaumasiotes wrote:
| No, his house was just as "destroyed" as everyone else's.
| It's like complaining that after his house was destroyed by
| the same hurricane that hit the rest of the neighborhood,
| FEMA made him, but only him, ineligible for assistance.
| sukruh wrote:
| The discontinuities at the used care sale prices graph seems like
| an arbitrage opportunity on depreciation. Buy right after a round
| number, sell right before another, pay less on dep.
| neilv wrote:
| I was all excited when I saw on Zillow a decent new apartment
| complex in town with rents that were actually reasonable...
| until, after hours of studying photos and floorplans and
| neighborhood, I noticed a statement on Zillow, near the bottom of
| the scroll, in one of the tabs in right column, that the building
| is subsidized, and there's a permissible income range.
|
| While some of us could qualify while on early startup salaries, I
| don't know how I'd feel about subsidies as a techbro, and I know
| I wouldn't feel good about having to move from a nice building
| (big time investment, moving monetary cost, and quite possibly
| moving to a crappier building) because the startup was doing OK.
|
| I was disappointed, but not surprised. As a middle-class techbro,
| this is a very lite version of a much bigger problem that has
| affected many low-income people. News has long had stories about
| low-income people who are trapped with subsidies they need
| (housing, food, support for children, etc.). They make a lousy
| wage, and can't afford to get much of a better wage, because the
| societal safety net on which they depend would be ripped out from
| under them before they could afford it to.
| hollerith wrote:
| >I know I wouldn't feel good about having to move from a nice
| building because the startup was doing OK.
|
| Subsidized apartment buildings in the US don't make you move
| out if your income goes up: they just take away your subsidy,
| i.e., your rent goes up to what HUD calls the apartment's
| "contract rent". Then HUD (statistically speaking) directs the
| money they used to use to subsidize your rent to building more
| subsidized housing. HUD _wants_ successful people living in
| HUD-subsidized buildings, at least the ones with children in
| them, to serve as role models.
| neilv wrote:
| Interesting; that sounds enlightened of HUD.
| throwitaway222 wrote:
| It's too bad income "cut-offs" even exist. Shouldn't it always be
| a smooth function?
| mbork_pl wrote:
| Smooth - definitely not. Continuous - yes. (SCNR.)
| simne wrote:
| It depends on public opinion. In some countries people think,
| taxes must be equal for all, or linearly grow (and with ideally
| smooth function).
|
| They even sometimes change mind and make experiment with other
| function.
|
| Many experts think, this is because in these countries, laws
| made entities tax agents (every entity pay all taxes for all
| hired people), so people just don't bother how many taxes they
| pay, and how much time spent to calculate all these things and
| to fill all papers.
| noqc wrote:
| The author of the marathon paper explains the phenomenon he is
| observing, and then goes on to "reject that explanation" without
| attempting to do anything to control for it.
|
| >For example, the 2013 Chicago Marathon provided pace teams for
| 3:00, 3:05, 3:10, 3:15, 3:20, 3:25, 3:30, 3:35, 3:40, 3:45, 3:50,
| 3:55, 4:00, 4:10, 4:25, 4:30, 4:40, 4:55, 5:00, 5:10, 5:25, and
| 5:45.T he institution of pace teams then could provide an
| alternative explanation for the bunching we observe at round
| numbers.
|
| It would be easy to do, even. Restrict to marathons where the
| pace team spectrum is known to be of a specific type and see if
| the other spikes disappear. The author certainly has the data to
| do this, and isn't. _That_ is suspicious.
| citrin_ru wrote:
| There is one more reason for discontinuity around 4:00 - many
| amateur runners make a goal to run in 4:00 or less (hard but
| achievable) and reduce training intensity once they finished in
| 3:5x - 4:00.
| jancsika wrote:
| > One reason people were looking for ways to lose money was that,
| in the U.S., there's a hard income cutoff for a health insurance
| subsidy at $48,560 for individuals (higher for larger households;
| $100,400 for a family of four). There are a number of factors
| that can cause the details to vary (age, location, household
| size, type of plan), but across all circumstances, it wouldn't
| have been uncommon for an individual going from one side of the
| cut-off to the other to have their health insurance cost increase
| by roughly $7200/yr. That means if an individual buying ACA
| insurance was going to earn $55k, they'd be better off reducing
| their income by $6440 and getting under the $48,560 subsidy
| ceiling than they are earning $55k.
|
| Except that in real life there is no /dev/null that you can
| immediately pipe in _exactly_ $6440 to hit your target.
|
| You have to spend your _time_ in order to achieve this reduction
| in AGI.
|
| And discontinuities being discontinuous means that the number of
| people who have the necessary training/experience to confidently
| achieve this in, say, three hours, is probably in the same
| ballpark as people who can successfully set up encrypted email in
| the same amount of time.
|
| For everyone else, it's going to take at least a week's worth of
| time to plan, double check, execute, triple check, etc. (And
| realistically double that, or more.)
|
| At 55K, you've already spent that savings in the value of the
| time you gave up to get the savings.
|
| People often make fun of free software developers for failing to
| properly value their own time. But at least that's not their
| domain of expertise. A financial hobbyist spending $2 of their
| time to save $1 is professional grade irony.
|
| Edit: clarification
| trevithick wrote:
| The example of buying options given in the article would take
| literally minutes for anyone with an existing brokerage
| account.
| nerdponx wrote:
| These aren't financial hobbyists.
|
| At $48,560, these are mostly people who don't have a lot of
| money relative to their living expenses, and are doing what
| they need to do in order to not feel totally broke. < $50k in a
| lot of places was already getting hard to raise a family on,
| even before Covid, all the moreso if you're paying full price
| for ACA exchange insurance, which was then and remains now
| disgustingly expensive.
| sanketsaurav wrote:
| aside: if you're on Arc browser, I made a boost that adds some
| styling to Dan's website to make the reading experience just a
| little better:
| https://arc.net/boost/80CE9A49-4D0A-48C6-9C53-13BF02696009
| mrandish wrote:
| Coding hard cut-offs like this into legislation, regulation or
| policies seems crazy almost to the point of negligence,
| incompetence or malice. Especially when it's so obvious such
| cliffs will incentivize behavior certain to cause negative or
| perverse outcomes. It's even more incomprehensible when
| implementing graduated thresholds is so well understood.
|
| A related common failure mode is baking in fixed, absolute
| thresholds for dynamic domains sure to evolve instead of linking
| thresholds to dynamic metrics (such as inflation, cost of living,
| etc).
| nerdponx wrote:
| It's often said that the cruelty is the point.
| thfuran wrote:
| If it were, why would they offer welfare programs at all?
| Surely an "indolence tax" assessed on anyone with income
| below a certain threshold would be more cruel.
| immibis wrote:
| What do you think poor people would do if there were no
| welfare programs?
| _carbyau_ wrote:
| This is what I find perplexing.
|
| Welfare programs are not for the poor.
|
| They are so the poor doesn't "eat the rich".
|
| (For those playing at home this is a slogan tossed around
| with connotations of society wide rebellion - which would
| not be a comfortable outcome for rich people.)
| AgentOrange1234 wrote:
| It's frankly amazing that we still have welfare, social
| security, etc., at all. The pro-cruelty folks have been
| diligently working to discredit them since FDR enacted them
| during the great depression.
| ryandrake wrote:
| Don't give them any ideas. Roughly half of US politicians
| would probably support that. Without constitutional
| safeguards, a shocking number of them would support turning
| their opponents into Soylent Green.
| padolsey wrote:
| This unthinking encoding of thresholds feels like a 'Systems'
| problem that percolates into almost every part of life, whether
| its income brackets or hard limits on how many books you can
| borrow from the library. Some make more sense than others, just
| out of the sheer complexity and cost of implementing continuous
| (e.g. tapering) systems in the real world.
|
| A particularly troublesome example I encountered, entirely
| unrelated to finance, was when working on a renal ward in
| hospital, we had to count respiration rate and input it into
| the obs machine, but if you inputted over 16, it would increase
| their sepsis score (or "acute deterioration"), meaning there'd
| be additional work to be done. It was rarely the case that they
| were actually producing symptoms of sepsis, but because of the
| hard threshold, to my horror, nurses would often just enter 16
| on the mark, and juniors like me were told to do the same.
|
| I'm sure there are literally tonnes of examples of these
| discontinuities and the bad incentives they produce across
| every industry and government function. In addition to laziness
| and inertia, I feel a general problem is that lack of
| curve/distribution/continuous-thinking in our schooling, as
| opposed to the easier discrete thinking.
|
| All systems are fundamentally analog in nature. If only we just
| taught things this way...
| creer wrote:
| How can it be blamed to negligence? It's not like these
| disincentives and dangerous gotchas are not obvious when these
| rules are written?
| rhelz wrote:
| If you are upset about somebody not wanting to take that $50k a
| year job because it would cost them a subsidy, just wait until
| you hear about trust funds and inheritance!!
|
| If you think losing a $20k subsidy is demotivating, imagine
| inheriting $25 million.
|
| So instead of knuckling down and working hard to contribute their
| fair share, they are incentivized to just loaf. No telling the
| costs to society from these freeloaders.
| philomath_mn wrote:
| - Trust fund babies are far more rare than people making ~$50k
|
| - Trust fund babies will not qualify for much government
| assistance
|
| It is a net good for the economy and the individual if a person
| who is capable of making ~$50k does so within the workforce,
| rather than avoid improving their own life in order to qualify
| for assistance.
|
| This is not a moralization of the use of government assistance,
| it is a criticism of the incentive structures within those
| assistance programs.
| rhelz wrote:
| > It is a net good for the economy [for individuals to
| improve their lives]
|
| I agree. If you've just inherited $25 million, it would
| _still_ be better for you and for society for you to get a
| job--even a job paying $50k a year if that is all you could
| get.
|
| But...are you going to be _incentivized_ to do so?
|
| If you care about somebody not wanting to make $50k because
| they'd lose a $10k subsidy, how much MORE should you care
| about a $25 million subsidy disincentivizing somebody to
| improve themselves and contribute to society as a productive
| citizen.
|
| > Trust fund babies are far more rare than people making
| ~$50k
|
| That just means that imposing enough inheritance tax to
| incentivize them to work wouldn't effect enough people to
| have a negative effect on the economy. And lets not forget,
| the person being taxed is dead. They will feel absolutely no
| ill effects from the tax. Its all upside.
|
| Not Trolling here. I advocate a 100% inheritance tax, the
| proceeds of which should be dedicated to education,
| nutrition, and housing for the next generation, to achieve
| the following goal: Equal ability should be given equal
| opportunity to succeed.
|
| And just giving free money to one kid and nothing to another
| is the _absolute diametrical opposite_ of that.
| jbboehr wrote:
| > I advocate a 100% inheritance tax
|
| What sort of nonsense half-measure is this? _I_ propose a
| 100% tax on parent-child resource transfers starting from
| the moment of birth!
|
| Although, you might just cut out the middleman, seize the
| children, and raise them in a state-run "Nurturing Center."
| _carbyau_ wrote:
| I enjoy a gaming science fiction universe with such
| "Clanners".
|
| Fun stories do not necessarily make for fun real life
| experiences I imagine.
| klyrs wrote:
| > seize the children, and raise them in a state-run
| "Nurturing Center."
|
| I don't know a parent who hasn't fantasized about this. I
| hadn't considered the inheritance angle; my kid's young
| yet.
| temphypercube wrote:
| Why would anyone with above-median ability to acquire
| resources stay in such a country
| rhelz wrote:
| Why would anybody with above-median ability to acquire
| resources _NOT_ want to live in a society where equal
| ability always means equal opportunity??
| philomath_mn wrote:
| - The government created an incentive structure keeping
| people on government benefits from being productive members
| of the economy. It should fix that.
|
| - There is still a question of scale: the trust-fund-baby
| population is several orders of magnitude smaller than the
| makes-50k population
|
| > I advocate a 100% inheritance tax
|
| Well then I don't think there is much common ground between
| us :) A 100% inheritance tax severely dis-incentivizes
| savings and investment, cutting off capital to the
| businesses that have created so much value over the last
| century.
| 2devnull wrote:
| The problem is labels, and beyond that political parties.
| Politicians like labels because the parties depend on labels for
| branding. They want to use rhetoric to group people, like "poor"
| or "rich" and the second you do that you create the
| discontinuity.
|
| Avoiding benefit cliffs requires more than understanding the
| issue of discontinuities, it requires the reduction of identity
| politics which neither party is on board with. Parties themselves
| are labels. They cater to the human desire to simplify and form
| tribes around those labels.
| whimsicalism wrote:
| > However, a tax system that encourages people to lose money,
| perhaps by funneling it to (on average) much wealthier options
| traders by buying put options, seems sub-optimal.
|
| In expectation, they're likely not really funneling that much
| money to options traders. Indeed - if the option pays out, they
| likely will not have to worry about medicare/healthcare for quite
| some time.
| inopinatus wrote:
| I remember my deep disquiet at a tax return where my reportable
| income was exactly 2^n-1 for some integer n, naturally provoking
| obsessive checking and audit on my part.
| BWStearns wrote:
| It's interesting how the marathon discrepancies mostly disappear
| at left and right of the curve (looking at 2:30 and 6:30).
| Presumably top runners are putting out 100% of sustainable effort
| the whole time so there's no reserve energy and the slowest are
| similarly doing all they can just to get the race done. The folks
| in the middle are the ones who are putting in something less than
| 100%.
| mrguyorama wrote:
| For those of you that are fans of Jon Bois, he once noted in a
| video that the statistics for ball placement by an NFL ref is
| notably skewed towards 5 yard lines.
|
| Because, he thought, refs are human.
| bparsons wrote:
| This is one of the many reasons that means tested, rather than
| universal programs end up producing perverse outcomes. People in
| countries with universal healthcare, daycare and education do not
| have to limit their participation or productivity in the real
| economy in order to access essential services.
| qazwsxedchac wrote:
| Marginal rate discontinuities in the UK income tax system [0] are
| driving highly undesirable (from the taxman's point of view)
| behaviour. The increase in marginal tax rate from PS100K p.a.
| upwards has already led to:
|
| - doctors going part-time to keep their income below PS100K, in
| the middle of a shortage of doctors across the health system
|
| - employees turning down promotions because with the combined
| effects of income tax, student loan repayments and loss of
| childcare subsidy the effective marginal rate of income tax
| between PS100K and PS117K is > 100% (!)
|
| - single high earners (core voters of the present government)
| effectively subsidising families of middling earners (the
| opposition's core voters) because the discontinuities apply to
| single person's income, not combined household income
|
| The behaviour changes are simple first order effects. The second
| order effects on public service workforce availability and
| overall tax take were also highly predictable.
|
| [0]
| https://www.telegraph.co.uk/multimedia/archive/03270/tax_327...
| heavenlyblue wrote:
| But these tax rates are all under the current government, why
| would single high earners vote for it?
| stephenbez wrote:
| If I understand the linked chart, there are discontinuities in
| the _marginal_ tax rate, not the effective tax rate. So in that
| case yeah at certain levels the amount you owe on each
| additional dollar goes up, but that would not mean that making
| 105k is worse than 100k unless the marginal tax rate is greater
| than 100%.
|
| This ignores stuff like losing childcare subsidies that is
| likely not included on the graph.
|
| In the us you hear stories of people decreasing their income to
| be in a lower tax bracket and often it is due to them not
| understanding that the tax brackets are for marginal tax rates.
| qazwsxedchac wrote:
| > If I understand the linked chart, there are discontinuities
| in the <i>marginal</i> tax rate, not the effective tax rate.
|
| True, but they are _harsh_ discontinuities, sufficiently so
| to have the effects I described. And yes, there is a common
| combination of personal circumstances (high income plus
| student loan repayments plus child care subsidies) which
| means that any gross salary between PS100K and PS117K means
| less net income than being on PS99,999 gross. I 've not been
| able find a graph for that, but the maths checks out.
|
| The result of this particular combination is to effectively
| impose a ceiling on many employees at PS100K gross, because
| they would have to receive a greater than 17% pay rise to be
| better off than before.
| creer wrote:
| > there are discontinuities in the marginal tax rate, not the
| effective tax rate
|
| This is often claimed. And the whole point of the article and
| much of this discussion is that no, there are often major
| steps / discontinuities in the overall tax rate. In the US,
| the many ACA discontinuities just by themselves are large and
| do not effectively pay attention to the bottom line. For that
| matter, I don't know of a single country or US state that
| actually "runs on effective tax rate". Which might be a
| solution to the problem if anyone were actually looking for a
| solution to the problem.
| nickpsecurity wrote:
| "Some other discontinuities are the TANF income limit, the
| Medicaid income limit, the CHIP income limit for free coverage,
| and the CHIP income limit for reduced-cost coverage."
|
| I know more than one person who intentionally keep low, part-time
| hours for this. One had a good, work ethic when on the job. Just
| didn't want to lose those benefits.
|
| Policy makers should definitely weight this into any decisions
| about reforms.
| vhcr wrote:
| We have some discontinuities in our tax code in Argentina, if you
| are an independent worker, and earn up to 11,916,410 pesos
| ($11,682) per year, you pay 793,332 pesos ($777) in taxes, around
| 6.6%, but if you earn one more peso, you enter the general
| regime, and start paying >50% in taxes.
| y04nn wrote:
| A simple solution (probably used in many places) to this
| problem is to have brackets. Everybody is taxed 6.6% on its
| income until a certain threshold and the rest is taxed at 50%.
| You can add more brackets as needed. And so, there is no
| incentive to be just bellow a certain bracket threshold.
| vavooom wrote:
| This article is so straightforward and well articulated to hammer
| in the main concept: statistics are funky!!
| YoshiRulz wrote:
| Okay but can we talk about how beautiful that Polish language
| exam score histogram is?
| renewiltord wrote:
| Is this true? You can't mark cap losses against income to reduce
| income more than a few thousand. You have to actively make less,
| not make bad investments.
| mbrubeck wrote:
| > You can't mark cap losses against income to reduce income
| more than a few thousand.
|
| You can if a significant part of your income is capital gains.
| bachmeier wrote:
| During the pandemic, as was the case for many organizations, my
| employer implemented pay cuts. In the name of fairness, they did
| it by income so that those with the highest incomes would pay a
| larger percentage. That sounds good, but they did it with
| discontinuities.
|
| What upset me was couples with combined salaries far greater than
| mine but individually a little less so they were just below the
| cutoff. Their combined cut on considerably more income was less
| than mine. We were living on one income, and the cuts would have
| been tough to absorb if not for the stimulus checks.
| SmartHypercube wrote:
| I don't think this is a problem about "discontinuity". It's about
| the monotonicity of the function from income before tax (and
| insurance, etc.) to income after tax. So I don't think "sharp
| threshold" is a problem, as long as the law is "if you are making
| more than this amount, _the extra part_ should be taxed at a
| higher rate. "
|
| From other comments I learn that some laws indeed do not work
| like this. Really?! That's awful.
| frozen4212 wrote:
| h
| dgemm wrote:
| Thresholds are almost always a bad solution (in engineering or
| otherwise) - the only advantage I have found for them is that
| they are usually easier to understand than the alternative.
| cranky908canuck wrote:
| Specific to the welfare/UBI/public benefits subthread of this
| (with a digression):
|
| I saw the phrase "middle class solution to lower class problem
| ['MCSLCP']" applied to stuff like this years ago; that
| characterisation is possibly not politically correct today. It
| was discussing various forms of 'credit fine print' --- the ad
| for "Buy this recliner today, no interest, no payments for three
| months!!!" ... followed by five lines of fine print at the bottom
| of the ad (likely double the verbiage of this posting) about need
| to pay promptly, the upfront fees, etc etc, and the (somewhat
| usurious) rates and fees payable if the process wasn't followed
| to the letter.
|
| What makes it 'MCSLCP' is that for a large percentage of the
| population that would look at this, if you have the time / savvy
| to assess the deal and make it work, you probably have better
| credit options available. [1]
|
| It's super easy to comply with the terms if you have a personal
| organization system ('tickler') that works. Maintaining that
| system is really tough if you're a single parent/double job
| trying to keep the ship afloat... and also to have the funds to
| keep the deal working on the day that the tickler is triggered.
|
| But the 'MCS' of the MCSLCP is, just buy it with the cash-back
| credit card, and pay the balance in full before the due date.
| Easy percentage, and you already do that as part of the monthly
| bill-payment chore.
|
| For the vendor, the deal is a moneymaker since the majority of
| the takers will not (be able to) comply with the letter of the
| terms, and the fees and rates become the profit.
|
| The public benefit aspect is that, the space to screw it up and
| lose the benefits is politically a feature, not a bug. The
| legislators can paint themselves as guardians of the public purse
| and the people who blew the cliff as thwarted welfare cheats.
|
| [1] if I could 'ping' patio11 on this... I think some recent
| posts from 'bits about money' are in the same area as this.
| cycomanic wrote:
| I disagree with the proposed solutions, all way to complex. The
| thing to do is simply give the subsidy to everyone and make up
| for it with higher taxes. That is how you achieve more equable
| outcomes, give fixed subsidies to everyone and recover via
| proportional taxes.
|
| Instead we end up with a situation where we have arbitrary
| cutoffs, a large buerocracy just checking for eligibility and
| often even progressive subsidies (giving more to those with
| higher incomes)
| aubanel wrote:
| I love the example with Russian elections! It's impressive that
| they allow themselves to be that low-effort in their fake
| results.
| zh3 wrote:
| There's also Poincare and the Bakery [0], which is quite possibly
| apocryphal but often told - esentially a departure from the
| normal disibution showing something odd going on.
|
| I vaguely recall reading that the technique was used in the
| second world war to catch black marketers; if the distribution of
| weights of rationed items had a discontinuity near the weight
| limit, it was evidence that the seller was keeping the heavier
| portions back for private sales.
|
| [0]
| https://houstonstatisticians.wordpress.com/2013/01/11/poinca...
| igammarays wrote:
| I suspect the inconvenience and weirdness of dealing with a hard
| cut-off is easier than the complexity of dealing with some kind
| of continuous scale. Laws need to be, first of all, easily
| comprehensible so that all parties can plan accordingly. It's
| easy enough to plan to keep your income under $X, but hard to
| figure out the optimum benefit/income sliding scale and plan
| accordingly. The only other simple and fair option I can think of
| would be to implement a "judge" to issue approval on a case-by-
| case basis instead of a hard number.
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